Taking a Sound Approach to Your Financial Treatment Plan – NaviPath Financial
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February 25, 2021

Taking a Sound Approach to Your Financial Treatment Plan

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Ryan Whitley

by Ryan Whitley

As the end of the year approaches us, now is the time to consider some more in-depth income tax planning strategies. Depending on your age and income, having the ability to defer 100k – 250k of taxable income can be a useful tax planning tool to utilize.

Having the ability to defer taxable income may also help you qualify for a partial or full Qualified Business Income deduction under the right circumstances.

A Cash Balance Plan is commonly used to defer larger amounts than the typical 401(k).

Often, the financial industry thinks of adding a Cash Balance Plan in addition to a 401(k); however, we have occasionally recommended standalone plans with no 401(k) at all.

We are working toward some innovative planning in this space and currently have a few options in mind for dentists in their late 30s. While not the typical candidate when you think of a Cash Balance Plan (age is one contributing factor), over 80% of the practice contributions are still going towards the owners.

Cash Balance Plans must be set up by year-end and funded by tax filing time.

While everyone's situation is unique, Cash Balance Plans, when structured properly, can be a powerful resource from a retirement savings and tax planning perspective. If you would like to review your personal situation or year-end tax planning strategies, please feel welcome to connect.

RFG Advisory and its Investment Advisor Representatives do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. Please consult your own tax, legal, and accounting professionals for guidance on such matters.

Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC. Advisory products and services offered by Investment Advisory Representatives through RFG Advisory, a Registered Investment Advisor. RFG Advisory, NaviPath Financial, and Private Client Services are unaffiliated entities.